Coinbase, Circle push for US action against Tether, non-compliant firms

Coinbase and Circle executives have called on the U.S. authorities to intensify actions against Tether and offshore crypto firms that fail to comply with regulations.

During a session with the House Financial Services Committee, Grant Rabenn, the head of Financial Crimes Legal at Coinbase, discussed the issue of criminals exploiting foreign platforms to bypass the strict anti-money laundering (AML) standards applied to regulated exchanges within the United States.

Rabenn mentioned that the Office of Foreign Assets Control (OFAC) has only sanctioned 560 crypto addresses. However, Coinbase investigation found more than eight million addresses linked to bad actors. Rabenn blamed offshore exchanges for crypto-related criminal activities and money laundering in the U.S. and urged the government to go after these platforms.

“Offshore entities often play jurisdictional whack-a-mole, attempting to avoid tough AML laws and expecting that regulators won’t care.”

– Grant Rabenn, the head of Financial Crimes Legal at Coinbase

Rabenn stressed the importance of the U.S. leveraging its full range of regulatory tools to pursue these non-compliant entities, expressing his support for recent enforcement actions in the crypto sector that emphasize the need for accountability.

Caroline Hill, Circle’s Chief of Global Policy and Regulatory Strategy, advocated for strict oversight of entities linked to the U.S. dollar, particularly stressing the importance of embedding democratic principles within USD-backed stablecoins. Hill specifically mentioned Tether’s major custodian, Cantor Fitzgerald, urging the government to exercise its existing powers to address any involvement in facilitating financial crimes.

“I would think that the Treasury Department has the authority to take actions against Tether, given this U.S. touchpoint, and I hope that they’re looking at this seriously.”

– Caroline Hill, Chief of Global Policy and Regulatory Strategy at Circle

She further expressed concerns over the practices of stablecoin issuers, particularly those not implementing proactive measures like smart contract technology to prevent misuse of their tokens.